You are an executive for SuperComputer, Inc.(SC), which rents out super computers. SC receives a fixed rental payment per time period in exchange for the right to unlimited computing at a rate of P cents per second. SC has two types of potential customers of equal

number10

businesses and 10 academic institutions.

Each business customer has the demandfunction:

Q=15P,

where Q is in millions of seconds permonth; each academic institution has thedemand:

Q=12P.

The marginal cost to SC of additional computing is

4

cents persecond, regardless of volume.

a.

Suppose that you could separate business and academic customers. What rental fee and usage fee would you charge eachgroup? What would be yourprofits? (Round all answers to the nearestinteger)

For businessusers, the rental fee would be $----per month and the usage fee is ----cents per second.

For academicinstitutions, the rental fee would be $ per month and the usage fee is -----cents per second.

SC's total profits are $ ---per month.

b.

suppose you were able to keep the two types of customers separate and charge a zero rental fee. What usage fee would maximize your profits?What would be your profits?

The profit maximizing usage fee is---- cents per seconds

SC's profits are ---- per month (nearest dollars)